Ultrabooks to the rescue?

IHS iSuppli expects sales of Ultrabooks and other ultra-thin notebook PCs to save the day for notebook sales after a tough start to 2013.

Last year was a difficult one for PC makers, with overall PC shipments contracting for the first time since 2001. This year isn’t starting off any better, at least for notebook PCs, according to market research firm IHS.

Notebook shipments typically decline in the first quarter of any given year compared to the holiday laden fourth quarter. But this year, IHS expects to decline to be particularly steep, with unit shipments from the top five original design manufacturers (ODMs) to drop 15 percent sequentially. The firm projects a bleak first quarter and slow first half for notebook sales, before Ultrabooks and other types of ultrathin notebooks revive consumer interest in notebooks in the second half of the year.

Ultrabooks largely flopped in 2012 as their generally high price tag—hovering around $1,000—proved unattractive to a most PC consumers. Sales of notebook and desktop PCs also faced stiff competition from tablets, with consumers gravitating to their lower prices, mobility and convenience.

But IHS said Ultrabooks and other ultra-thin notebook PCs are being given a new lease on life in 2013 in light of new features, including improved battery power, a form factor that lets the display be detached for use as a tablet, a higher-performance central processing unit in the form of Intel’s Haswell chip, and the gradual uptake of the recently released Windows 8 operating system.

“Notebook ODMs in early 2013 are feeling the pain from the combined impacts of uncertain economic conditions and slower-than-expected sales of Ultrabook PCs,” said Peter Lin, senior analyst for compute platforms at IHS, in a statement.

I don't think ultrabooks will help the PC market recover. The decline will be much faster than even the slow growth ultrabooks may get. But ultrabooks will remain a niche market. Most consumers don't want $1000 devices, whether they are laptops are "tablets". And the latest stats show that with an average price of Windows PC's of only $450.

Well said. I can remember thinking that it sure would be nice to view content on the internet without being perched at my desk in front of my PC. Then wireless LAN came around, and I was surfing with my bulky, noisy, hot laptop while lying in bed. Then tablets came around and they were exactly what I had been looking for all along. I still use my old PC for composing sending mail, doing taxes, and other "active" work. An ultrabook seems to be trying to fill both niches: passive consumption with the keyboard off, and active work with the keyboard on.

The product price pyramid has been up-ended. No longer is there a simple continuum from big and cheap desktop computers to small and expensive laptops. SmartPhones, iPads, Ultrabooks, Notebooks and tablets have divided the market into many niches. The value proposition of a Ultrabook is no longer clear.

Several factors from my point of view. 1. The advancement of software we witnessed in the past that limited a computer's efficiency has seemed to slow down to the point where PC's and laptops live much longer - why upgrade? 2. Pricing for ultrabooks when there are much cheaper brand names running Intel i5 or i7 processors that consumers are very comfortable with at the moment. 3. How robust is the mechanical interface between screen and laptop body - how many cycles before my kids break it is seriously on my mind for a $1,000 device. 4. Alternatives -$300 for a standard laptop plus a $199 tablet (let's say Google Nexus 7) and I have spent half the money for an ultrabook. 5. As Bert mentioned, many mainstream, general public consumers are looking for devices for "information consumption" in a mobile way. And why wouldn't they be - they've been conditioned for this with smart phones. Unless there is some game changing feature, I am not interested in an expensive Ultrabook, unless, of course, my employer buys me one.

I'd like to see what success the Surface Pro will have. Too bad that its $900 price tag seems simply too high.
Cheap(er) tablets will of course outsell more useful appliances, such as laptops and notebooks. I don't know why the trade press hasn't understood this yet. They are a different animal. Tablets are more a replacement for printed media, books, magazines, newspapers, than they are a functional replacement for notebooks or laptops.
The fact that many people had no choice but to use laptops to do "information consumption" previously does not change this reality, I don't think.